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Franchises facing recruitment challenge

Tuesday, 19 October 2010 | By Oliver Milman

Australia’s franchises are in good shape, although recruiting franchisees remains a major issue, according to new research.

 

A survey of 150 top franchise CEOs by DC Strategy found that more than 40% experienced at least 8% growth over the past 12 months, outstripping the rest of the economy.

 

Nearly half generated at least 15% profit, while 22% of those surveyed plan to enter international markets within the next three years.

 

However, franchisors flagged franchisee recruitment as the biggest challenge for the sector over the coming year. Other recent studies have shown that despite the relative strength of the franchise sector, the industry is struggling to identify enough high-quality candidates to fill positions.

 

Rod Young, executive director of DC Strategy, says: “During the economic downturn, many groups believed the anticipated increase in unemployment would be beneficial to the franchising sector.”

 

“This was not the case, with the unemployment rate remaining stable meaning the number of potential franchisees has fallen.”

 

The DC Strategy study found that candidates now have access to more capital than before, although the demographics of franchisees remain stubbornly unchanged.

 

The report found that 80% of franchisees were men, while previous reports have indicated that franchisors aren’t doing enough to appeal to young people or those who weren’t raised in Australia.

 

“Groups need to consider a clear strategy to attract female franchise candidates to ensure they do not limit their growth to an even greater extent,” Young says.